Microsoft Reorganizes All Divisions, Names New Xbox Head

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“A far-reaching realignment of the company that will enable us to innovate with greater speed, efficiency and capability in a fast changing world.”

By Andrew Goldfarb

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Microsoft has announced a sweeping reorganization that will split it into entirely new groups. As announced in a memo from CEO Steve Ballmer, the change is “a far-reaching realignment of the company that will enable us to innovate with greater speed, efficiency and capability in a fast changing world.”

The company will now be split into a dozen groups including Operating Systems Engineering, Devices and Studios Engineering, Applications and Services Engineering, Cloud and Enterprise Engineering, Dynamics, Advanced Strategy and Research, Marketing, Business Development and Evangelism and more.

The Devices and Studios Engineering group -- which contains “all hardware development and supply chain from the smallest to the largest devices we build” and “experiences including all games, music, video and other entertainment” -- will be run by Julie Larson-Green, former head of Windows products. This role is rumored to have been offered to former head of Microsoft’s Interactive Entertainment Business Don Mattrick, who left Microsoft last week. On Twitter, Aaron Greenberg (former Chief of Staff of Microsoft's Interactive Entertainment Business) clarified that he is staying with the team and "will be Chief of Staff for Devices & Studios," reporting to Larson-Green.

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The Operating Systems Engineering group, which also will "span all our OS work for console, to mobile device, to PC, to back-end systems," will be headed by Terry Myerson, former head of Windows Phone. The Business Development and Evangelism group, which will "focus on key partnerships" including "our broad work on evangelism and developer outreach" will be run by Tony Bates, former head of Skype.

“We are rallying behind a single strategy as one company — not a collection of divisional strategies,” Ballmer wrote. “Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands. We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders. All parts of the company will share and contribute to the success of core offerings, like Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers.”

"Improving our performance has three big dimensions: focusing the whole company on a single strategy, improving our capability in all disciplines and engineering/technology areas, and working together with more collaboration and agility around our common goals," he added. "This is a big undertaking. It touches nearly every piece of what we do and how we work. It changes our org structure, the way we collaborate, how we allocate resources, how we best empower our engineers and how we market."

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In the wake of recent communication problems, Microsoft will also "reshape how we interact with our customers, developers and key innovation partners, delivering a more coherent message and family of product offerings."

"Lots of change. But in all of this, many key things remains the same," Ballmer concluded. "Our incredible people, our spirit, our commitment, our belief in the transformative power of technology — our Microsoft technology — to make the world a better place for billions of people and millions of businesses around the world. It’s why I come to work inspired every day. It’s why we’ve evolved before, and why we’re evolving now. Because we’re not done."